Amazon Buys Lexcycle, Gains iPhone E-Book Software

Online retailer Amazon has quietly purchased a Portland, Ore., and Austin, Texas-based startup called Lexcycle, which had developed an application named Stanza that allowed Apple iPhone and iPod touch owners to use the devices like an electronic book reader. Lexcycle posted the news in a short blog post on the company Website.

“It has been an amazing experience to see Stanza grow out of our brainstormed ideas into one of the most downloaded iPhone applications,” the post reads. “Throughout this period we have attempted to listen to and innovate for our customers to provide a great eBook reading experience.” The post stated the company is not planning any changes in the Stanza application or user experience as a result of the acquisition.

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The move suggests Amazon is working to tighten its grip on a growing Apple-centric e-book market. Terms of the deal were not disclosed. Amazon has found success in the nascent eBook market as well with the Kindle and now Kindle2, a 3G wireless-enabled eBook reader, which retails for $359 on Amazon.com. On March 4, Amazon introduced a “Kindle for iPhone and iPod touch,” application available for free from Apple's App Store. More than 240,000 books are available on Kindle.

Amazon's Whispersync technology allows customers to save and synchronize their bookmark across their original Kindle, Kindle 2, iPhone and iPod touch, meaning Kindle customers can read a few pages on their iPhone or iPod touch and pick up right where they left off on their Kindle or Kindle 2. Lexcycle says each day, between 40,000 and 60,000 books are downloaded wirelessly from Stanza’s online catalog. The application is available in 12 languages. More than 100,000 different e-Books are available with approximately half of them available for free.

Just before the start of 2009, Lexcycle’s application, which natively supports the DRM-free ePub format, had been downloaded more than one million times since appearing for free on Apple’s App Store in mid-July. Amazon’s proprietary Kindle platform currently does not support ePub, which could suggest Amazon is considering a move to a more open e-book marketplace, which would also give the company greater presence in open mobile ecosystems such as Google’s Android platform.

Stanza currently boasts over 1.3 million users across more than 50 countries.

Cinthia Portugal, a spokeswoman for Amazon.com, told The New York Times that while the e-book market is still very young, she hoped that would serve as an opportunity for innovation. “Lexcycle is a smart, innovative company, and we look forward to working with them to innovate on behalf of readers,” she told the Times.

“We are excited to join forces with a company that has innovated on behalf of readers for over a decade and is a pioneer in ebooks,” Lexcycle’s blog post concludes. “Like Amazon, we believe there is a lot of innovation ahead for e-books and we could not think of a better company to join during this exciting time.”